Correlation Between Invesco Raymond and First Trust
Can any of the company-specific risk be diversified away by investing in both Invesco Raymond and First Trust at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Invesco Raymond and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Raymond James and First Trust Equity, you can compare the effects of market volatilities on Invesco Raymond and First Trust and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Invesco Raymond with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Raymond and First Trust.
Diversification Opportunities for Invesco Raymond and First Trust
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and First is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Raymond James and First Trust Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Equity and Invesco Raymond is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Invesco Raymond James are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Equity has no effect on the direction of Invesco Raymond i.e., Invesco Raymond and First Trust go up and down completely randomly.
Pair Corralation between Invesco Raymond and First Trust
Considering the 90-day investment horizon Invesco Raymond is expected to generate 1.82 times less return on investment than First Trust. But when comparing it to its historical volatility, Invesco Raymond James is 1.27 times less risky than First Trust. It trades about 0.05 of its potential returns per unit of risk. First Trust Equity is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,218 in First Trust Equity on August 28, 2024 and sell it today you would earn a total of 4,605 from holding First Trust Equity or generate 56.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 84.24% |
| Values | Daily Returns |
Invesco Raymond James vs. First Trust Equity
Performance |
| Timeline |
| Invesco Raymond James |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| First Trust Equity |
Invesco Raymond and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Raymond and First Trust
The main advantage of trading using opposite Invesco Raymond and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Raymond position performs unexpectedly, First Trust can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in First Trust will offset losses from the drop in First Trust's long position.| Invesco Raymond vs. Invesco SP MidCap | Invesco Raymond vs. Invesco Zacks Mid Cap | Invesco Raymond vs. Invesco SP Spin Off | Invesco Raymond vs. Invesco SP SmallCap |
| First Trust vs. Invesco SP Spin Off | First Trust vs. Renaissance IPO ETF | First Trust vs. First Trust NYSE | First Trust vs. Invesco BuyBack Achievers |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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